…The acquisition follows an offer from Heineken Beverages for NB to acquire Heineken Beverages’ business and operations in Nigeria.
…Heineken had earlier acquired the Distell Group Holdings Limited (DWSN) in South Africa.
MON, NOV 20 2023-theGBJournal|The Board of Nigerian Breweries Plc (NB) is meeting its shareholders for decision on the acquisition of 80% economic interest, voting, and other rights held by Heineken Beverages (Holdings) Limited in Distell Wines & Spirits Nigeria Limited.
The Board resolved after a Special meeting on the 16th of November 2023, to recommend to Shareholders in a general meeting, holding today, for their consideration and approval of the acquisition.
Heineken’s interests and rights are held through Distell International Holdings Limited, and 100% of the import business of Heineken Beverages (Holdings) Limited in Nigeria (including the license to market, distribute and sell the imported products, as well as produce any of the imported brands locally).
The acquisition follows an offer from Heineken Beverages for NB to acquire Heineken Beverages’ business and operations in Nigeria. Heineken had earlier acquired the Distell Group Holdings Limited (DWSN) in South Africa.
The Transaction is structured in two parts; the acquisition of an 80% equity stake in DWSN and the acquisition of 100% of Heineken Beverages’ import business in Nigeria.
The DWSN acquisition gives Nigerian Breweries 80% of the economic interest, voting and other rights in DWSN.
The 100% acquisition of the import business gives Nigerian Breweries an exclusive right to import all Heineken Beverages’ wines, spirits and ciders brands from South Africa, as well as the license to market and distribute the products in Nigeria, including the right to locally produce any of the imported brands.
The Transaction is expected to provide Nigerian Breweries with access to a complimentary multicategory portfolio of fast-growing brands in the wines and spirits market segment and capture the significant growth opportunities in that market.
The Transaction would also eliminate any potential conflict between two controlled subsidiaries of Heineken in Nigeria, that is, between Nigerian Breweries and DWSN.
The Transaction will be implemented in line with Chapter 20 of the Nigerian Exchange Limited
(NGX) Rulebook, 2015.
NB says the proposed acquisition, which will also be subject to any applicable regulatory approval process, aligns with its strategic objective of expanding its current product offerings beyond beer to include, wines, spirits, and flavored alcoholic beverages.
It also provides the Company with growth opportunities and long-term profitability.
Stanbic IBTC Capital Limited and Banwo & Ighodalo were drafted to act as Lead Transaction/Financial Adviser and Legal Adviser respectively, to provide requisite advice and
guidance to the Company on the Transaction.
The firm of Deloitte & Touche was also appointed to conduct Finance and Tax Due Diligence on DWSN and the import business.
DWSN’s operations commenced in 2018 and consist of a local manufacturing, marketing and sales
of a portfolio of wines and ready-to-drink beverages (“RTDs”). DWSN’s leading brands which are produced, marketed, and distributed in Nigeria under license from Heineken Beverages include 4th Street wine range (red, rose, white, sparkling and non-alcoholics), Chamdor, Hunters Dry, Savannah Dry and Gold.
Heineken Beverages owns an 80% equity stake in DWSN, while the other 20% is held by Next
International Limited and Ekulo International Limited who each hold a 10% stake.
The 80% equity stake is held in the name of Distell International Holdings Limited.
DWSN’s operates from a 1.4 hectares site in Ikeja, Lagos State and currently utilises distributors across the country who distribute its products across thousands of outlets.
It was incorporated in Nigeria on 8 March 2018 as a private company limited by shares.
In the full year ended 30 June 2023, DWSN generated a net revenue of N4.9 billion, and an Earnings Before Interest Taxation, Depreciation and Amortisation (EBITDA) of N667 million.
The consideration put forward by Nigerian Breweries for the proposed acquisition of the 80% economic and voting rights in DWSN and 100% of Distell’s import business in Nigeria is N7.01 billion.
Following the conclusion of the Transaction, DWSN will become a subsidiary of Nigerian Breweries. Also, the operations of Nigerian Breweries will be expanded to include importation, marketing and distribution of wines, spirits and cider products.
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